Couple of up days and need to reallocate - options?

[stephenson]

Couple of good market days - would like to sell and reallocate a bit

So, my megacorp 401K is a bit overloaded with equities - in particular, Emerging Markets, US Large Cap and US Small Cap.

I was considering rebalancing to a Treasuries fund this afternoon ...

Would appreciate comments!!

George

 

[stephenson]

So, my megacorp 401K is a bit overloaded with equities - in particular, Emerging Markets, US Large Cap and US Small Cap.

I was considering rebalancing to a Treasuries fund this afternoon ...which of the three categories would be best to reduce given they are all over my AA about the same amount.

Would appreciate comments!!

George

PS - this is dupe from individual stock picking, but wanted to get some inputs.

 

[Animorph]

I'd return them all to the target allocation. But I'd wait for the allocations to cross a threshold, or for the normal rebalance date. You don't usually want to rebalance too soon, though if there are no costs involved it's probably not a big deal.

 

[LOL!]

Since there are no tax consequences in a 401(k), why not reduce them all?

I guess that since you did not mentioned large-cap developed foreign markets that you have that in another account? Otherwise, that's the one that I would be rebalancing into. See the LOL!'s market timing thread.

 

[stephenson]

Hi Animorph,

I haven't been as analytical about AA as I should be ...I'll get better!

Decided to pull some from US Large Cap and Emerging Markets and put in the Treasuries fund.

Getting to about 5 years out from calling it quits so I need to get a lot more thoughtful about this

 

[stephenson]

LOL!

Thanks ... I don't really have an AA process or baseline right now ... will need to get a lot more analytical and soon!!!

 

[mrfeh]

will need to get a lot more analytical and soon!!!

I think that would be a good idea. Changing your AA isn't something you should do according to your gut.

Write an IPS. Create rules for when to rebalance.